The US motor insurance market is projected to grow from USD 466 billion in 2025 to USD 702.99 billion by 2030, reflecting a robust 8.57% compound annual growth rate (CAGR), according to a 2025 report by Mordor Intelligence.
The market’s expansion is driven by shifting mobility trends, evolving regulations, and new technologies that are reshaping insurance coverage. Motor insurance remains a crucial part of the financial services sector, providing protection for millions of drivers across the United States.
The US motor insurance landscape combines traditional underwriting with emerging digital platforms. Insurers are responding to consumer demand for flexible policies with customized solutions, including usage-based insurance and embedded coverage at the point of sale.
The rise of electric vehicles (EVs) has increased repair and replacement costs, especially for batteries and specialized components. Insurers are adjusting pricing, claims processes, and repair partnerships to meet the needs of EV owners.
Telematics programs are gaining popularity, allowing insurers to reward safer driving and base pricing on actual behavior rather than broad demographics. Many drivers are attracted to these pay-how-you-drive models for transparency and potential savings.
Frequent climate-related events such as flooding, hail, and hurricanes are increasing claims volatility. Carriers are enhancing risk models and expanding reinsurance coverage to manage regional losses more effectively.
Consumers now expect fast quotes, mobile policy management, and photo-based claims, making digital-first channels essential. Traditional agents continue to play a role for complex or bundled policies.
Modern vehicles equipped with driver assistance systems and sensors have also raised average repair costs. Even minor accidents often require recalibration of safety features, extending claim settlement times.
The report highlights that these trends—EV adoption, telematics, digitalization, and climate-related risk—will continue to shape the US motor insurance market in the coming years.
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